Saturday, February 26, 2011

Gulf Finance strengthens UAE SMEs

Steve Williams,
CEO of Gulf Finance
SME Advance opens up a much needed window of financing for start-up companies
Bounced cheques will not result in legal action
SME sector constitutes 90 per cent of the business in the UAE, generate 30 per cent of GDP and is responsible for 88 per cent of employment

Dubai, UAE: Gulf Finance, a leading UAE-based boutique financial firm specialising in the small and medium enterprise (SME) market, has recently launched a new product, SME Advance, which boldly tackles real issues faced by start-up and small businesses seeking financing to boost business growth.

SME Advance provides local small businesses with a secure finance option which will not see SMEs penalised for bounced repayment cheques – a chief differentiator for this product. Swift lending decisions can be made on client applications to allow businesses access to funds as quickly as possible. SME Advance has been specifically designed to suit smaller companies and thus does not require more than only basic financial and operational company information.

The product also offers an interest-only period option for start-up businesses with tighter cash flow, an extended tenor of up to five years and a simple online application process. Business assets and collateral are not mandatory and the product also boasts the flexibility of zero early settlement fees should a business wish to repay the loan early.

SME Advance is applicable to a range of industry segments, with a clear focus on start-up and younger firms. With this new product, Gulf Finance can offer loans up to AED 250,000 to businesses with turnover of up to AED 1 million.

SME’s contribute extensively to the UAE economy – they are responsible for 90 percent of the business universe, generate 30 percent of GDP and are responsible for 88 percent of employment. The sector is also growing at an annual rate of up to 25 percent which solidifies the need for a product such as SME Advance to boost this vital market.
SMEs often struggle to gain access to basic financing facilities; a report released by the Union of Arab Banks and the World Bank in October 2010 revealed that SMEs in the Middle East receive just eight per cent of regional bank lending. For GCC-based SMEs the figure was even lower, sitting at two per cent of all bank lending.

As part of its sharp focus and commitment to the development if the region, Gulf Finance supports many SMEs in the UAE through its various finance offerings. The company has so far provided over AED 2 billion in finance to SMEs in the UAE.

Steve Williams, CEO of Gulf Finance, said: “Research highlights the difficulties SMEs face in accessing capital. This problem is particularly acute in this region; the complexity of SMEs’ business models coupled with their limited track records often result in variable lending appetite from mainstream financial institutions.”

Williams added that taking the tough decision to start up a small business should be applauded. Whilst the rewards over time can be substantial, the risks, particularly in earlier growth phases, are significant. Variable cash-flow, reduction in personal earnings and the weight of responsibility are all things that need to be considered. Alongside this is the very real and unsettling risk of spending a period in jail should the business fail and is unable to meet its obligations.

“Gulf Finance recognises that while many small businesses will succeed, there are those that may fall short. What is important is that a culture of entrepreneurship is developed. Gulf Finance is therefore taking a unique approach to supporting SMEs. At the heart of the SME Advance proposition is an explicit acknowledgment that some SMEs may fail and that this failure should not be compounded by jail time. Whilst, like any other lender, Gulf Finance expects its clients to repay their loan, the company will not pursue criminal action if a cheque is bounced. By making it easier and less painful to finance an SME, SME Advance is changing the marketplace for the better. A more active market leads to higher growth and with that comes better earnings,” Williams said.

In recent years, Gulf Finance has invested heavily in building a highly professional client facing team with deep routed experience in commercial lending. This experience, together with organisational flexibility results in the development of products such as SME Advance, which over time, will create a thriving SME environment.

About Gulf Finance

Gulf Finance is an ambitious, progressive finance company licensed and regulated by the UAE Central Bank. Gulf Finance offers a variety of straightforward lending and deposit based products. The company’s prime focus is on serving clients from the power, oil and gas, healthcare, manufacturing and logistics industries. In addition it has built a solid and credible reputation in the marine finance industry.

Headquartered in Dubai, with offices in Abu Dhabi and Sharjah, Gulf Finance is a strong institution which has consistently achieved excellent financial performance. The business carries a long-term 'BB' rating from Capital Intelligence, which has been reaffirmed in August of 2009. This places the business on a par with many larger local financial institutions.

Over the last decade Gulf Finance has provided over 2 billion AED in finance to SMEs within the UAE. On a day to day basis the business is managed by strong team of international financial professionals and is overseen by a successful and respected board of directors comprising individuals of the highest local standing and credibility. For more information about Gulf Finance, please visit

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